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A Novel Look at Outsourcing in the Asset Management Industry: The Customer‘s Perspective

Product Type: Market Research Report
Published by: TowerGroup
Published: August 2004
Product Code: R301-1108
Description
Most of the outsourcing story has been told from the perspective of the provider, which tends to oversimplify the business value and underestimate the challenge of migrating to a shared infrastructure model. Providers, including custodian banks and technology firms, needed to actively market their services, so it was inevitable that public discussion and industry press coverage of outsourcing would put a positive spin on the subject. Even neutral industry observers interpret survey data to help support a certain perspective. When 40% of buy-side respondents indicate they plan to increase the scope of outsourcing, it is interpreted as validation of the business model. One has to wonder about the 60% that don't plan to increase their level of outsourcing.

This is not to suggest TowerGroup does not support outsourcing. Quite the contrary. We believe the model has real value and massive potential. What we are suggesting is that there is no consensus among asset managers regarding the strategic value of BPO. An individual's perspective will always be colored by his or her assessment of BPO as either a threat or a new source of revenue. Has outsourcing proven itself to be a successful business model for asset managers and their providers, or has the whole trend been overstated? The truth lies somewhere in between.
Table of Contents
TowerGroup Take-Aways




Report Coverage


Exhibit 1: The Bell Curve of Attitudes Toward Outsourcing within the Financial Services Industry (2004)




Vision




Outsourcing Services Revisited


Exhibit 2: The Suite of Primary Business Process Outsourcing Services Offered by Custodians (2004)




Fits and Starts

Expectations vs. Reality

The Compliance Effect

Business Value

Business Drivers


Exhibit 3: Key Drivers of Outsourcing (2004)




Lesson Learned

Engage the Front Office

Stuck on You

Less Than Warp Speed

Less Is More

Overcoming Outsourcing Dilemmas




Fundamentals of "Lift-Out"


Exhibit 4: Economics of the "Lift-Out" (2004)


Future of Lift-Outs




Market Size


Exhibit 5: Growth of Custody and Outsourcing Fees Among Top Global Providers of Custodial Services (2004-07)




Summary
Ordering and More Information
Price and Delivery Options


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